DESPITE a month-on-month spike in developers' sales in March, sales of private homes in both the primary and secondary markets eased in the first quarter, according to latest figures from Urban Redevelopment Authority.
Official figures yesterday on primary market activity show that developers' sales of private homes excluding executive condos (ECs) rose 25.4 per cent month on month to 1,386 units in March, buoyed by higher sales in Core Central Region and Rest of Central Region, as well as a bigger proportion of transactions in higher price bands.
However, the 3,595 units which developers sold in the first quarter (excluding units sold in the first two months of this year which have been returned to developers) were 15.2 per cent below the 4,241 units sold in the preceding quarter and 17.9 per cent lower than the 4,380 units they sold in Q1 2010.
In addition, CB Richard Ellis' analysis of URA Realis caveats data reflects a slowdown in secondary market sales in Q1. The number of private homes transacted in the resale market, which involves projects that have received Certificate of Statutory Completion (CSC), fell to 3,168, down 24 per cent from the previous quarter.
Subsales - secondary market deals involving projects that have yet to receive CSC and which are often seen as a proxy for speculative activity - also slipped, down 25.5 per cent quarter on quarter to 550 units.
Year on year, the Q1 resales volume was down about 36 per cent and subsales fell around 45 per cent. However, analysts say that the final resale and subsale numbers for Q1 may be higher as more caveats are lodged.
They also note that despite the drop in both primary market and resale deals in Q1, the figures remain above the 3,000-unit mark, keeping prices firm.
'The government's cooling measures are taking effect gradually,' said DTZ head of consulting & research (SE Asia) Ong Choon Fah. However, she warns that given the substantial amount of land that developers are buying at state tenders, the speed at which they are launching projects on them, and pace of demand from buyers, 'there's potential risk of an oversupply when all these projects are completed in a few years' - if a substantial proportion of these homes are not being bought for owner occupation.
More immediately, Mrs Ong cautions that further policy measures to address asset inflation in China and Hong Kong may have a knock-on effect for Singapore if funds are diverted to the island.
CBRE executive director Joseph Tan attributes the drop in Q1 developer sales to speculators being weeded out by the cooling measures. 'The current volume represents genuine demand from occupiers and owners.'
URA figures yesterday show that including ECs (a hybrid of public and private housing), developers' sales totalled 1,543 units in March, 25.2 per cent more than February's 1,232 units. The 1,246 units (including ECs) they launched in March were down 27.1 per cent from 1,710 units in February.
Colliers International consultant (research and advisory) Tay Huey Ying noted that developers' monthly sales (excluding ECs) have stayed above the 1,000-unit mark since January 2010 with the exception of June and September 2010 - despite several rounds of cooling measures.
'The fact that this has been accompanied by six consecutive quarters of moderation in q-o-q growth in URA's private residential price index may suggest that the 1,000-1,200 unit a month new sales level may represent a healthy state of the residential market and not one of over-exuberance. This is supported by Singapore's enlarged population and draw as an investment destination and the appeal of property as a hedge against inflation,' said Ms Tay.
CBRE expects developers to sell about 3,000-3,500 units in the second quarter, with prices remaining stable.
Last year, developers sold a record 16,292 private homes (excluding ECs), up 10.9 per cent from the preceding year.
URA's flash estimate earlier this month reflected a 2.1 per cent q-o-q rise in the overall private home price index, which climbed 17.6 per cent for the whole of 2010.
Colliers noted that the sales volume (excluding ECs) in Core Central Region - which includes prime districts 9, 10 and 11, the financial district and Sentosa Cove - climbed 85.2 per cent month on month to 263 units in March, while the figure for Rest of Central Region (which covers locations such as Bukit Merah, Queenstown, Geylang, Toa Payoh and Katong) posted a 119.6 per cent m-o-m sales increase to 492 units. However, the volume of mass-market homes in Outside Central Region recorded a 14.6 per cent m-o-m drop to 631 units. Further evidence of interest returning to pricier properties was seen in a jump in the proportion of new sales at above $2,000 psf from 8 per cent in February to 15 per cent in March.
H20 Residences in Sengkang was the top-selling project by a developer in Q1, with 255 units transacted at a median price of $943 psf. Other popular projects included Questa@Dunman (100 units at $1,319 psf), Skysuites@Anson (76 units at $2,109 psf) and Skysuites 17 in the Balestier area (71 units at $1,463 psf). A Scotts Square unit sold for $4,334 psf while a Boulevard Vue unit fetched $4,308 psf.
Meanwhile, Tripartite Developers is said to have yesterday sold about 100 units on the first day of preview of The Hedges in Upper Changi. The average price is said to be around $850-860 psf.